nep-geo New Economics Papers
on Economic Geography
Issue of 2021‒01‒04
five papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Lockdowns and Innovation: Evidence from the 1918 Flu Pandemic By Enrico Berkes; Olivier Deschenes; Ruben Gaetani; Jeffrey Lin; Christopher Severen
  2. The City Paradox: Skilled Services and Remote Work By Lukas Althoff; Fabian Eckert; Sharat Ganapati; Conor Walsh
  3. Does the Running Variable Matter? A Second Look at Discontinuity Designs for Evaluating Regional Economic Development and Business Incentive Policies By Daniele Bondonio
  4. All Aboard: The Effects of Port Development By César Ducruet; Réka Juhász; Dávid Krisztián Nagy; Claudia Steinwender
  5. When education and urban policies overlap: Effect on academic achievement By Fanny Alivon; Manon Garrouste; Rachel Guillain

  1. By: Enrico Berkes; Olivier Deschenes; Ruben Gaetani; Jeffrey Lin; Christopher Severen
    Abstract: Does social distancing harm innovation? We estimate the effect of non-pharmaceutical interventions (NPIs)—policies that restrict interactions in an attempt to slow the spread of disease—on local invention. We construct a panel of issued patents and NPIs adopted by 50 large US cities during the 1918 flu pandemic. Difference-in-differences estimates show that cities adopting longer NPIs did not experience a decline in patenting during the pandemic relative to short-NPI cities, and recorded higher patenting afterward. Rather than reduce local invention by restricting localized knowledge spillovers, NPIs adopted during the pandemic may have better preserved other inventive factors.
    JEL: N92 O31 R11
    Date: 2020–11
  2. By: Lukas Althoff; Fabian Eckert; Sharat Ganapati; Conor Walsh
    Abstract: The large cities in the US are the most expensive places to live. Paradoxically, this cost is disproportionately paid by workers who could work remotely, and live anywhere. The greater potential for remote work in large cities is mostly accounted for by their specialization in skill- and information-intensive service industries. We highlight that this specialization makes these cities vulnerable to remote work shocks. When high-skill workers begin to work from home or leave the city altogether, they withdraw spending from local consumer service industries that rely heavily on their demand. As a result, low-skill service workers in big cities bore most of the recent pandemic’s economic impact.
    Keywords: remote work, high-skill services, technological change
    JEL: O33 R11 R12
    Date: 2020
  3. By: Daniele Bondonio (University of Piemonte Orientale)
    Abstract: Regional economic development and business incentive programs have a prominent role in the European Union (EU). For evaluating these programs, in recent years, a growing number of studies have exploited either spatial discontinuities, set by boundaries of the targeted areas, or ranking discontinuities, based on EU-fund eligibility indexes or firm-level application scores. In light of this literature, impact evaluations are being increasingly commissioned and designed under an a-priori assumptions that discontinuity designs have superior impact identification properties. This paper argues that in a number of frequently encountered, but often unrecognized, circumstances this assumption does not hold ground. When the running variable has a weak influence on the outcome of the analysis, discontinuity designs are at risk of either unnecessarily reduce external validity or, in the presence small sample sizes, failing to achieve the complete balancing of relevant controls. In this scenario, ensuring the common support for the crucial confounders and adopting statistical matching estimators, often constitute a more viable empirical option.
    Keywords: Discontinuity designs, Regional economic development, Business incentives, EU cohesion Policy
    JEL: O1 R5 C23
    Date: 2019–09
  4. By: César Ducruet; Réka Juhász; Dávid Krisztián Nagy; Claudia Steinwender
    Abstract: This paper examines the effects of port development on the economy. By using scarce local land intensively, ports put pressure on local land prices and crowd out other forms of economic activity. We use the introduction of containerized shipping – a technology that substantially increased land requirements at the port – to estimate the effects of port development. We find an important role for the crowding-out effect both at the local and at the aggregate level. First, we show that the causal effect of the shipping boom caused by containerization on local population is zero – port development increases city population by making a location more attractive for firms and consumers, but this well-known market access effect is fully offset by the crowding-out mechanism. Second, to measure the aggregate implications, we add endogenous port development to a standard quantitative model of cross-city trade. Through the lens of this model, we estimate that containerization increased aggregate world welfare by 3.95%. However, relative to the positive welfare effects of a trade-cost reduction in standard models, our model implies a sizeable welfare cost associated with the increased land-usage of ports, partly offset by welfare gains from endogenous specialization based on comparative advantage across port- and non-port activities. In terms of the distributional effects, we find that initially poorer countries gained more from containerization as they had a comparative advantage in port development.
    Keywords: port development, containerization, quantitative economic geography
    JEL: O33 F60
    Date: 2020
  5. By: Fanny Alivon (Université de la Réunion); Manon Garrouste (Université de Lille, Lem-CNRS); Rachel Guillain (Université de Bourgogne-Franche-Comté, LEDi)
    Abstract: In this paper, we study the effect on academic achievement of the overlap between urban and education placed-based policies in France. The identification challenge comes from two potential bias due to individual location choices and school choices. To analyze causal effects, we propose to use regression discontinuities at the boundaries of treated zones. We use very precise geocoded data at the neighborhood, school, and individual levels in the Paris municipality to investigate the net effect of each type of programs, as well as potential interaction effects. Preliminary results suggest that the net effect on academic achievement of urban policies is negative and that there is no advantage of benefiting from both types of programs.
    Keywords: Place-based policies, Education policies, Regression discontinuity
    JEL: I24 I28 R28 C21
    Date: 2019–02

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